20 Interesting Car Insurance Shopping Trends (2021 Report)

While researching car insurance shopping trends, we found that the coronavirus pandemic impacted policyholders shopping habits tremendously. In the past 12 months, 17% of car insurance customers have reduced coverage, 15% searched for another car insurance provider, and 13% raised their deductible. In addition, technology continues to influence buying habits with people searching for rates via the Internet the most, even when they purchase by phone or through an agent.

Chris Tepedino is a feature writer that has written extensively about car insurance for numerous websites. He has a college degree in communication from the University of Tennessee and has experience reporting, researching investigative pieces, and crafting detailed, data-driven features. His works have been featured on CB Blog Nation, Flow Words, Healing Law, WIBW Kansas, and Cinncinati.com. H...

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Joel Ohman is the CEO of a private equity backed digital media company. He is a CERTIFIED FINANCIAL PLANNER™, author, angel investor, and serial entrepreneur who loves creating new things, whether books or businesses. He has also previously served as the founder and resident CFP® of a national insurance agency, Real Time Health Quotes. He has an MBA from the University of South Florida. Jo...

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Reviewed by Joel Ohman
Founder & CFP®

UPDATED: Aug 19, 2021

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Here's what you need to know...

  • State Farm leads all car insurance companies with $40.4 million premiums written
  • Almost 40% of all policyholders have shopped for car insurance in the past year
  • High-risk drivers shop for car insurance less than other consumers
  • Younger generations value eco-friendliness in their car insurance companies

It’s been over one year since the coronavirus landed on the United States’ shores, and business in America has changed. E-commerce has exploded and the adoption of digital communication tools such as Slack and Zoom has grown dramatically.

But what about car insurance?

We cover the car insurance shopping trends of 2021 in this list, the buying habits that have changed since the start of the coronavirus pandemic.

Some of these shopping trends may be directly linked to the pandemic. Others are natural progressions that happen with technology.

These auto insurance shopping trends affect all major providers, including GEICO, American Family, State Farm, and Allstate. If you take a look at the graphic at below, you can see the top 10 auto insurance providers and how much money they’ve written in terms of premiums (it’s in millions).

Largest Car Insurance Companies by Premiums Written

But these numbers are for now, as buying habits are changing. The facts we’ll share with you paint a picture of a target market that wants more out of their car insurance providers. And the car insurance companies that bring that value to the market will ultimately succeed.

Read on and be prepared for the intrigue, fascination, and the utter coolness that these facts show. Later, we’ll cover car insurance shopping tips — it’s a little bit of a car insurance shopping guide, so that you know the ins and outs of getting the best deal. Let’s get started.

Table of Contents

Car Insurance Shopping Trends in 2021

Drumroll, please. Here we go: 20 major facts about car insurance shopping trends that’ll enrich, surprise, and inform you. These are the cutting edge shopping trends the coronavirus pandemic and technology have led to and continue to accelerate. The topics include:

  • Shopping using technology
  • The influence of social media
  • The desire for insurance provider alternatives
  • Sharing data for rewards

Scroll down to see what car insurance consumers want and where, perhaps, the auto insurance industry is heading.

#1 – 28% of policyholders are considering buying car insurance from an online service provider like Amazon

In a survey, 28% of current policyholders say they would consider purchasing car insurance from an online service provider like Amazon or Google. That’s up from 22% two years ago.

#2 – 24% of policyholders are considering buying car insurance from supermarkets or retailers

Supermarkets include Walmart or stores that have high brand loyalty with customers. This 24% of policyholders is up from 18% in 2018. This underscores people’s dissatisfaction with current auto insurance providers and a desire for more options.

If a major retailer started to offer auto insurance, this would pose a threat to current auto insurance companies and create more competition from an untraditional angle, possibly driving premiums down.

#3 – 73% of consumers are interested in “pay-per-mile” car insurance

The desire for pay-per-mile or pay-as-you-drive car insurance stems from the COVID-19 pandemic. With people forced to stay in their houses, miles driven plummeted in many cities around the U.S. Today, people still drive less even though most or all quarantines and shelter-in-place orders have lifted.

Due to that, more people want usage-based car insurance, a kind of auto insurance where what you pay is based on how many miles you drive. In general, it’s less expensive than regular car insurance.

#4 – 17% of policyholders have reduced coverage in the past 12 months

When the coronavirus pandemic hit, many people ran into financial trouble. One financial strategy was to lessen car insurance costs, as most people weren’t driving anyway. The main four changes people made were:

  • 17% reduced coverage
  • 15% shopped for another insurer
  • 12% increased their deductible
  • 12% switched to another provider

Even with the givebacks and rebates auto insurance companies offered, people needed to save more. So they started searching for more affordable insurance.

#5 – Almost 40% of all households have shopped for car insurance in the past year

Four out of 10 households have shopped for auto insurance in the past 12 months. The top two reasons were a “major life event” such as having a child and “reducing expenses due to COVID-19.”

#6 – High-risk drivers shopped for car insurance less than the average consumer

High-risk drivers, who already have higher insurance rates than the average policyholder, shopped for insurance less due to financial hardship. This group often has limited options for auto insurance due to their driving record and must purchase high-risk car insurance.

#7 – The most influential factor for customer satisfaction is car insurance price

According to LexisNexis, customer satisfaction in the auto insurance buying process comes down to one thing: Price. Money is the biggest factor in how satisfied policyholders are after purchasing auto insurance, and, as we’ve seen, people are always looking to save more.

#8 – Consumers who shop digitally for car insurance are more satisfied with the buying process than those who shopped with an agent

Representing the growth of a long-term trend, customers who use digital means to shop for insurance are more satisfied with the buying process than those who buy from an agent. Digital means include search engines, third-party websites, and online auto insurance quote tools.

#9 – 94% of insurance shoppers only know of traditional car insurance companies

Although Insuretech has been a rapidly growing part of the insurance industry, most people aren’t aware of these companies. Whether due to legacy status or advertising, most shoppers only know about the traditional insurance companies — the State Farms and GEICOs of the world.

#10 – Gen Z and Millennials are shopping for car insurance more frequently than older generations

According to TransUnion, Gen Z and Millennial shopped for insurance more than Baby Boomers and older generations over the past 12 months. Gen Z shopped the most overall, with a big spike in Q1 of 2020.

#11 – Consumers ages 18-34 want car insurance options that make them healthier and safer

Gen Z and Millennials are not just interested in auto insurance: They want an ecosystem where they have options for better safety and health. This can include telematics systems in relation to auto insurance or discounts for advanced safety features in vehicles.

#12 – 71% of Millennials and Gen Zs value sustainability and ethics in their car insurers

And they also want to know their auto insurance company will be around for a little bit and is a company with fair business practices. This is an extension of the idea of corporate stewardship. Millennials and Gen Z want to know their insurance company has good values and consistently acts with them. Otherwise, they’ll take their money elsewhere.

#13 – 69% of consumers say they would share driving data to get cheaper premiums

Sharing data is commonplace now as almost every app wants access to your information, which many people give without a second thought. Here, most consumers are willing to share driving data, but only if they receive discounts or reduced rates in return.

All of the top 10 car insurance companies offer what are called “telematics systems” or “black box car insurance.” These systems analyze your driving and offer you discounts depending on how safe a driver you are.

#14 – 71% of consumers ages 55+ prefer digital claims processes more than those in-person

Even the older generations are changing their tastes in how they interact with auto insurance companies; 71% like digital claims processes more than in-person. This speaks to the growing ease of submitting claims through digital channels like auto insurance company websites or apps.

#15 – Social media channels influence 40% of consumers’ car insurance buying decisions

Perhaps unsurprisingly, four out of 10 consumers look at social media when deciding which insurance company to buy from. Social media often contextualizes an auto insurance company. Sometimes, ads bring the funny. Other times, they show how the insurance company is helping the community.

#16 – Consumers use the Internet the most to shop for car insurance

Even if the end point in the buying process for consumers is an agent or purchasing over the phone, consumers still use the Internet the most. It’s a smart move, as comparing rates and buying auto insurance online is crucial for saving the most money.

#17 – 37% of policyholders contact their car insurer digitally more often than they did two years ago

Policyholders are contacting their auto insurance companies more through digital means than ever before. Thirty-seven percent now communicate with their auto insurance company through its website or app at least once a month, up 14% from 23% two years ago.

#18 – Shoppers are more satisfied when they buy car insurance through a company rather than an agent

Auto insurance shoppers report better satisfaction with the buying process when purchasing through a company rather than an agent. Market share numbers back this up: GEICO and Progressive, which emphasize the online buying process, have been gaining policyholders for a number of years.

#19 – 30% of people who shopped for car insurance during 2020 wanted to reduce expenses

During the COVID-19 pandemic, 30% of auto insurance shoppers looked for a better deal. There was one main goal: Reduce expenses.

#20 – The top five car insurers account for 60% of all car insurance premiums

More and more, the top five auto insurance companies are dominating the competition. Those five companies are:

  • State Farm: 16.2% market share
  • GEICO: 13.6% market share
  • Progressive: 13.3% market share
  • Allstate: 10.4% market share
  • USAA: 6.3% market share

But they are not stagnant. As GEICO and Progressive have been gaining market share, State Farm has been losing. Ever since State Farm hit 20% market share in 2011, it has fallen steadily, now to 16.2%. GEICO and Progressive have used painless and user-friendly online quote systems to take chunks of its market share.

Overall, the largest 10 car insurance companies have 74.9% of the car insurance market share. The graphic below shows each of them with their corresponding share of the market.

Largest Car Insurance Companies by Market Share

The Big Five dominate the market but the Top 10 all together have nearly 3/4s of the entire market. This leaves very little for the hundreds of other car insurance companies out there.

Car Insurance and Autonomous Vehicles

With those 20 facts, we’ve seen how COVID-19, technology, and the mentalities of younger generations have changed the way we shop for auto insurance. But there is another big change on the horizon, one that may turn the auto insurance industry upside-down: Autonomous vehicles.

Self-driving cars could affect commutes, road trips, parking, and just about every aspect of driving.

Driverless vehicles could save consumers billions of dollars because human error causes 94% of all car accidents. If autonomous vehicles can remove that risk, there will be fewer claims.

Car manufacturers who make autonomous vehicles may begin to offer their own insurance policies directly to their customers because they know the vehicles and technology in those vehicles better. In the table below, you can see five major self-driving vehicle manufacturers and what their purpose is.

Top 5 Self-Driving Car Companies
Embark Trucks2016Driverless trucks for the shipping industry
Tesla2003Autonomous vehicles for consumers
Voyage2017Self-driving vehicles in retirement communities
Waymo2009Commuter vehicles and self-driving trucks
Zoox2014Driverless rideshare vehicles

Consumers may soon be able to purchase auto insurance from numerous sources like car manufacturers, which will increase competition in the auto insurance industry and lower premiums.

And if self-driving vehicles cut down on the number of accidents or claims filed, the auto insurance industry market cap may shrink significantly.

How to Save Money While Shopping for Car Insurance

The 20 car insurance shopping trends above are a mix of long-term technological trends and one major event: COVID-19. It has changed our buying habits, even in the car insurance industry, one of the oldest, most staid industries.

Everyone wants to save money on car insurance, regardless if you’ve shopped in the past 12 months or not.

A little extra money can make the difference between working constantly or taking a vacation — or buying something nice for someone you love. So how do people save money on car insurance? In the list below, you’ll see numerous ways. Some are well known, some are not.

  • Raising your deductible
  • Searching for more discounts
  • Using a telematics system
  • Buying usage-based insurance
  • Dropping coverage you don’t need
  • Comparing quotes from different companies

The last one is important to highlight. Many of the factors insurance companies use to determine your rates are not in your control (gender or age) or are hard to change (ZIP code or credit score).

Still, you can find the best rate by comparing quotes between them. Each auto insurance company weighs rate-setting factors differently, giving you an opportunity to find the perfect fit for you.

Some auto insurance companies are better for people with low credit scores, others for those who have an accident on their record, and others if you’re in a high-risk demographic like an 18-year-old male.

Comparing quotes between many different auto insurance companies gives you an edge. While you can’t negotiate your rates with a single company, you can compare rates from all of them and find the best deal.

Frequently Asked Questions: Shopping & Saving on Car Insurance

We’ve knocked out the facts, autonomous cars, and how to save on car insurance. Scroll down to read eight frequently asked questions surrounding shopping and saving on car insurance.

#1 – How do you shop around for car insurance?

The quickest and easiest way to shop around for car insurance is to use an online quote comparison tool. You input your information just once and will receive a number of quotes from insurers in your area.

#2 – Why is shopping around for car insurance important?

Most car insurance companies use the same factors to set insurance rates: gender, age, driving history, credit score, commute distance, and more. But they all weigh them differently. That’s why you might get a $300 per month premium from one company and a $200 per month premium from another.

Shopping around helps you get the best deal.

#3 – When should I start shopping for car insurance?

If you don’t have insurance yet but you plan to drive soon, you should be thinking about shopping for insurance right away. Car insurance is mandatory in 49 states, so to drive without it is illegal. And the consequences can be steep. Other times when you might want to start shopping are if you’ve had a major life event (bought a house, had a kid) or if you’re moving to another state.

#4 – How do you shop around for home and car insurance?

Using a quote comparison tool is the quickest way to shop for home and car insurance. You enter your information once and receive quotes from numerous companies. Another option is to approach auto insurance companies directly, either through their websites, over the phone, or in person.

#5 – What is a fair price for car insurance?

This depends a great deal on where you’re living, your demographic factors, your credit score, and your driving history. Some states (or cities and even ZIP codes) have higher average rates than others. If you have an accident or a driving infraction on your record, you might see vastly different prices for car insurance depending on the company.

#6 – What day is car insurance cheapest?

It’s less of a day and more of a time frame. You’ll likely get the best deal on car insurance if you shop at least 21 days before you want that policy to start. Shopping at the last minute puts you at a disadvantage because insurance companies know you need car insurance to legally drive.

#7 – Does shopping for car insurance hurt your credit?

No, there is no “hard pull” on your credit when you apply for a quote. Your credit score will remain unaffected.

#8 – What are some ways to save money on car insurance?

We’ve talked about a few ways: comparing quotes, searching for discounts, using telematics systems, raising deductibles, but one way to save is a lot more basic.

Knowing exactly the auto insurance coverages you need can save you money because you wouldn’t purchase more than you need. Car insurance can be a difficult subject to understand, but you could save a lot more money now and down the road if you do.